Hong Kong-listed airlines briefly rise on report China plans to cut quarantine
Hong Kong-listed shares of some Chinese airlines rose briefly following a Bloomberg report that Chinese authorities are debating reducing the quarantine period for inbound travelers.
Shortly after the report, China Southern Airlines was up about 3%, Air China was up about 2%, and China Eastern Airlines was up more than 1%. The stocks have since pared most of their gains.
In Japan, ANA Holdings also gained 1.54% and Japan Airlines gained 1.36%.
Meanwhile, Cathay Pacific shares were last down more than 2% and Korean airlines and travel-related stocks continued to trade around 2% lower.
– Jihye Lee
DoubleLine Capital’s Gundlach says Treasury yields could peak before the end of the year
DoubleLine Capital CEO Jeffrey Gundlach said U.S. Treasury yields “may well peak by the end of the year.”
“Note how flat the long term is,” he said in a tweet, following a list of current yield levels. “Sign of exhaustion of increased yield.”
The 10-year Treasury yield climbed as high as 4.154% after hitting its highest level since July 2008 during the US markets session. It was last at 4.1485%. The 2-year Treasury bond was last trading at 4.5695% as the 5 year ticket traded at 4.3712%.
– Jihye Lee
Oil prices climb despite the release of strategic US oil supplies
Oil prices rallied on Thursday as markets shrugged off announcements that the United States would release more crude from its reserves.
Brent futures edged up 0.85% or $0.80 to settle at $92.41 a barrel, while United States West Texas Intermediate rose more than $1, or 1.45%, to $85.55 a barrel.
“Upside pressure is coming, however, from OPEC+ supply cuts and looming EU sanctions on maritime imports of Russian oil,” Commonwealth Bank of Australia’s Vivek Dhar wrote in a note.
He added that the release of 15 million barrels of strategic US oil stocks was already expected and that it is “too small to have an impact on the market”.
— Lee Ying Shan
Australian unemployment rate stable at 3.5%
Australia’s unemployment rate for September was unchanged from the previous month at 3.5%, according to the Australian Bureau of Statistics – in line with analysts’ expectations in a Reuters poll.
Diana Mousina, senior economist at AMP Capital, said she expects the jobless rate to stay at current levels in the near term before rising next year.
“Job growth should slow significantly to see an increase in the unemployment rate in the near term,” she wrote in a note.
CNBC Pro: Hedging Bonds Before a Recession? BlackRock says it’s an “obsolete” playbook
Recession fears are stirring markets, but the typical playbook of hedging in sovereign bonds is “outdated”, says BlackRock.
“In this environment, the bond vigilantes are back and heralding the return of the term premium,” BlackRock said, adding that it was underweight government bonds.
The asset manager says investors can still buy other types of bonds, however.
CNBC Pro subscribers can learn more here.
China keeps interest rates unchanged
China’s central bank left key rates unchanged for a second straight month, matching most analysts’ expectations in a Reuters poll.
The People’s Bank of China said it would keep the one-year prime lending rate at 3.65% and the five-year rate at 4.30%, according to an announcement.
Earlier in the week, the PBOC also announced that it would keep medium-term lending rates stable.
Hong Kong tech stocks plunge, drag broader index down
Shares of Hong Kong-listed tech companies fell sharply in early trading, with the Hang Seng Tech index falling 4.6% and dragging the broader Hang Seng index lower.
Heavy weights Ali Baba was down 6.12%, while Tencent lose 4.26%.
bilibili plunged 7.75%, while JD.com lost 5.82%. Meituan down 6.23%.
The Japanese yen approaches 150 against the US dollar
the Japaneses yen slightly near 150 against the greenback, at levels not seen since August 1990. It was last at 149.94 to the dollar.
The yen hovered around 159.8 levels in April 1990 and last broke through 160 levels in December 1986.
Japanese officials spoke out against further currency weakening on Thursday, with Finance Minister Shunichi Suzuki saying the government will take “appropriate measures against excessive volatility”, Reuters reported.
“The recent rapid, one-sided declines in the yen are undesirable. We absolutely cannot tolerate excessively volatile movements driven by speculative trading,” he said.
– Jihye Lee
CNBC Pro: Chip stocks have been down all year – but one looks ‘really attractive,’ fund manager says
Semiconductor stocks have been beaten this year, but investors with a longer-term view of the importance of chips to secular trends such as 5G, electrification and artificial intelligence could look to buy the decrease.
Hedge fund manager David Neuhauser shares a chip stock he likes.
Pro subscribers can learn more here.
— Zavier Ong
Japan’s September trade deficit narrows slightly
Japan’s trade deficit for September was 2.09 trillion yen ($13.97 billion), according to provisional government figures – missing figures estimated by a Reuters poll forecasting a deficit of 2.17 trillion yen .
The country recorded a trade deficit of 2.82 trillion yen in August.
Exports for the month of September were 8.82 trillion yen, while imports were 10.9 trillion yen.
Japan’s trade deficit for the first half of fiscal year 2022-23 is the largest on record, the finance ministry said in a Reuters report.
Japan’s fiscal year begins in April and the deficit for the April-September period was 11 trillion yen, the data showed.
Chinese offshore yuan hits record high overnight
The offshore yuan hit a record low of 7.2745 against the dollar overnight as the National Congress of the Communist Party of China continues. The offshore yuan last changed hands at 7.2708 to the dollar.
“A very big uncertainty is when the Chinese government relaxes its strict zero-Covid policy,” according to a note from the Commonwealth Bank of Australia.
Analysts wrote that the strict measures are expected to remain until early 2023.
“The restrictions will prolong the period of weakness in the Chinese economy and keep AUD/USD and NZD/USD undervalued for longer and push USD/CNH to 7.30,” the note said.
The risk-aware Australian dollar was lower at $0.6264 in early Asia, while the New Zealand dollar changed hands at $0.5662.
Investors weigh on rising Treasury yields
Investors watched Treasury yields for signs of a recession on Wednesday, although a stronger-than-expected start to the earnings season helped support markets this week.
Of the 64 S&P 500 companies that reported third-quarter results through Wednesday, 69.4% beat expectations, according to FactSet data.
Still, soaring Treasury yields helped stocks return to “real life” on Wednesday, according to comments from LPL Financial’s Quincy Krosby. On Wednesday, the 10-year Treasury yield hit 4.136%, its highest level since July 2008.
“A regular 3-month/10-year reversal would strengthen the Treasury market’s signal that a recession is in sight, as it has a reputation for predicting a severe economic downturn,” Krosby wrote.
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